================================================================================

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2006
                                                 -------------

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

          For the transition period from ____________ to_____________

                        Commission file number 0 - 24012


                               KODIAK ENERGY INC.
                      -------------------------------------
             (Exact name of registrant as specified in its charter)


                Delaware                            65-0967706
     -------------------------------            -------------------
     (State or other jurisdiction of             (I.R.S. Employer
      incorporation or organization)            Identification No.)


            734 7th Ave S.W. Suite 460, Calgary, AB, T2P 3P8, Canada
            --------------------------------------------------------
               (Address of principal executive offices - Zip code)

                                 (403) 262-8044
                                ----------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

     Yes      No  X
         ---     ---

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

     Yes  X   No
         ---     ---

     As of June 30, 2006, the Registrant had approximately 88,759,428 shares of
Common Stock, $.001 par value per share outstanding.


<PAGE>


                               KODIAK ENGERY INC.
                                      INDEX



                                                                            Page
                                                                            ----
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS                                                 3

         Condensed Consolidated Balance Sheets as of  June 30, 2006
          (unaudited) and June 30, 2005                                       3

         Condensed Consolidated Statements of Operations (unaudited)
          for the three months and six months ended June 30, 2006
          and 2005                                                            4

         Condensed Consolidated Statements of Cash Flows (unaudited)
          for the six months ended June 30, 2006 and 2005                     5

         Notes to Condensed Consolidated Financial Statements                 6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION           11

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS         13

ITEM 4.  CONTROLS AND PROCEDURES                                             13

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                   13

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                           13

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                     13

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                    14








                                        2
<PAGE>


KODIAK ENERGY, INC.
Consolidated Balance Sheets
(Development Stage Company)

-------------------------------------------------------------------------------
                                                 June 30,          December 31
                                                   2006               2005
                                                (Unaudited)         (Audited)
-------------------------------------------------------------------------------
Assets

Current Assets:
     Cash Accounts                             $   1,869,788    $       235,793
     Other Receivables                               117,150              6,470
     Prepaid Expenses                                 72,063             57,850
     --------------------------------------------------------------------------
                                                   2,059,001            300,113
Capital Assets:
     Oil & Gas Properties     (Note 4)             1,254,074            267,956
     Property & Equipment     (Note 4)                28,197             13,903
     Accumulated Amortization (Note 4)                (4,098)            (1,075)
     --------------------------------------------------------------------------
                                                   1,278,173            280,784
-------------------------------------------------------------------------------
                                               $   3,337,174    $       580,897
================================================================================

Liabilities and Shareholders' Deficiency

Current Liabilities:
     Accounts Payable                                 96,638            101,255
     Accrued Liabilities                             163,297              4,590
     --------------------------------------------------------------------------
                                                     259,935            105,845

Asset Retirement Obligations (Note 5)                 53,632                  -

Shareholders' Deficiency

Share Capital:
     Authorized:
          100,000,000 Common Shares
          Par Value .001 Each

     Issued & Outstanding 89,759,428
              (2005 - 473,558)(Note 6)                89,758                473
     Shares Issuable                                       -            800,000
     Additional Paid in Capital                    4,108,200             25,750
     Shares Subscription Receivable                 (85,000)                  -
     Deficit Accumulated during the
     Development Stage                            (1,046,152)          (309,502)
     Other Comprehensive Loss                        (43,199)           (41,669)
     --------------------------------------------------------------------------
                                                   3,023,607            475,052
-------------------------------------------------------------------------------

                                               $   3,337,174    $       580,897
================================================================================

(See accompanying notes to the unaudited consolidated financial statements)


                                       3
<PAGE>


KODIAK ENERGY, INC.
Unaudited Consolidated Statements of Operations
(Development Stage Company)


<TABLE>
<CAPTION>

                                       Three          Three             Six             Six      Cumulative Since
                                       Months         Months           Months         Months         Inception
                                      June 30,       June 30,         June 30,        June 30,     Apr 7, 2004 to
                                        2006           2005             2006            2005       June 30, 2006
                                    ----------------------------------------------------------------------------
<S>                                 <C>             <C>            <C>             <C>          <C>
REVENUES                            $          -    $          -    $          -    $          -    $          -
                                    ----------------------------------------------------------------------------

EXPENSES
   Administrative                        566,932           1,359         742,813           8,487       1,026,240
                                    ----------------------------------------------------------------------------
   Loss Before Other Expense            (566,932)         (1,359)       (742,813)         (8,487)     (1,026,240)
   Other Income and Expenses
   Depletion, Depreciation and
     Accretion                            (2,597)                         (3,807)                         (4,882)
   Loss from valuation adjustment              -                               -                         (25,000)
   Interest Income                           (55)                          9,970                           9,970
                                    ----------------------------------------------------------------------------
                                          (2,652)              -           6,163               -         (19,912)
                                    ----------------------------------------------------------------------------
NET LOSS                            $   (569,584)   $     (1,359)   $   (736,650)   $     (8,487)   $ (1,046,152)
                                    ============================================================================


BASIC AND DILUTED LOSS PER
COMMON SHARE                        $      (0.01)   $      (0.00)   $      (0.01)   $      (0.02)

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                    58,670,571         473,558      50,880,243         473,558

</TABLE>



(See accompanying notes to the unaudited consolidated financial statements)




                                       4
<PAGE>


KODIAK ENERGY, INC.
Unaudited Consolidated Statements of Cash Flows
(Development Stage Company)


<TABLE>
<CAPTION>
                                                                                                              Since
                                                 Three        Three            Six             Six           Inception
                                                 Months       Months          Months         Months         Apr 7, 2004
                                                June 30,     June 30,        June 30,       June 30,             to
                                                  2006         2005            2006           2005         June 30, 2006
                                              --------------------------------------------------------------------------
<S>                                           <C>           <C>            <C>              <C>          <C>
OPERATING ACTIVITIES
NET LOSS                                      $  (569,584)  $     (1,359)  $    (736,650)   $  (8,487)   $    (1,046,152)
Adjustments to reconcile net loss to
net cash used in operating activities:
   Depletion, Depreciation and Accretion            2,597                          3,807                           4,882
   Contributions To Capital                             -                              -                             900
   Foreign Currency Translation                  (105,476)                        (1,530)                        (42,876)
   Compensation                                   337,500                        337,500                         337,500
   Loss From Valuation Adjustment                       -                              -                          25,000
Changes in Non-Cash Working Capital
Components:
  Change In Other Receivables                     (86,627)                      (110,680)                       (117,150)
  Change In Prepaids                                8,363                        (14,213)                        (72,063)
  Change In Accounts Payable                      (21,750)                        32,096                         133,351
  Change In Accrued Liabilities                   158,707          1,359         158,707        8,487            163,297
                                              --------------------------------------------------------------------------
Net Cash Used in Operating Activities            (276,270)             -        (330,963)           -          (613,311)

Investment Activities:
Additions to Capital Assets                      (631,682)                      (947,564)                     (1,229,423)
                                              --------------------------------------------------------------------------
Net Cash Used in Investing Activities            (631,682)                      (947,564)           -         (1,229,423)

Financing Activities
Shares issued for cash                          1,781,529                      2,949,235                       3,749,235
Change In Accounts Payable                        (36,713)                       (36,713)                        (36,713)
                                              --------------------------------------------------------------------------
Net Cash From Financing Activities              1,744,816                      2,912,522            -          3,712,522

Net Cash Increase                                 836,864                      1,633,995                       1,869,788
Cash beginning of Period                        1,032,924                        235,793                               -
                                              --------------------------------------------------------------------------
Cash end of Period                            $ 1,869,788              -   $   1,869,788            -    $     1,869,788
                                              --------------------------------------------------------------------------


(See accompanying notes to the unaudited consolidated financial statements)


                                                            5
</TABLE>
<PAGE>


KODIAK ENERGY, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
For the Three and Six Month Period Ended June 30, 2006
Stated in US dollars


1.   ORGANIZATION AND BASIS OF PRESENTATION


The interim consolidated financial statements include the accounts of Kodiak
Energy Inc. and subsidiaries (collectively "Kodiak", the "Company", "we", "us"
or "our") for the periods ended June 30, 2006, June 30, 2005 and the period from
April 7, 2004 (inception) until June 30, 2006, are presented in accordance with
generally accepted accounting principles in the United States of America
("GAAP") on the same basis as the audited consolidated financial statement as at
and for the period ended December 31, 2005, except as outlined in Note 3. These
interim consolidated financial statements should be read in conjunction with
December 31, 2005 audited consolidated financial statements and the notes
thereto. Interim results are not necessarily indicative of results expected for
the fiscal year. These interim consolidated financial statements have not been
audited.

The Company is incorporated under the laws of the state of Delaware. The Company
is in the development stage and its efforts have been principally devoted to
capital raising, organizational infrastructure development, and acquisitions of
oil and gas properties for the purposes of future extraction of the resources
from inception.

At the annual general meeting held on July 18, 2006, the shareholders of the
Company voted in favor of increasing the authorized common shares to
300,000,000.


Going Concern
-------------

For the period from inception to June 30, 2006 the Company has an accumulated
deficit of $1,046,152 and has been dependent on equity financing, loans from
shareholders and the exchange of stock for services to meet its obligations and
sustain operations.

The company will need working capital for its future planned activity, which
raises substantial doubt about its ability to continue as a going concern.
Continuation of the Company as a going concern is dependent upon obtaining
sufficient working capital to be successful in this effort. The management of
the Company has developed a strategy, which it believes will accomplish this
objective, through additional loans from officers, and equity funding, which
will enable the Company to operate for the coming year.



2.   SIGNIFICANT ACCOUNTING POLICIES


Income Taxes
------------

The Company utilizes the liability method of accounting for income taxes. Under
the liability method deferred tax assets and liabilities are determined based on
the differences between financial reporting and the tax bases of the assets and
liabilities and are measured using the enacted tax rates and laws that are
expected to be in effect, when the differences are expected to reverse. An
allowance against deferred tax assets is recognized, when it is more likely than
not, that such tax benefits will not be realized.


Loss Per Common Share
---------------------

Basic Earnings per Share ("EPS") is computed by dividing (loss) income by the
weighted average number of common shares outstanding for the period. Diluted EPS
is computed giving effect to all dilutive potential common shares that were
outstanding during the period. Dilutive potential common shares consist of
incremental shares issuable upon exercise of stock options and warrants,
contingent stock, conversion of debentures and preferred stock outstanding.


                                       6
<PAGE>


Financial and Concentrations Risk
---------------------------------

The Company does not have any concentration or related financial credit risk.


Financial Instruments
---------------------

The Company's financial instruments, including cash, and accounts payable and
accrued liabilities are carried at values that approximate their fair values due
to their relatively short maturity period.


Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Although these estimates are based
on the knowledge of current events and actions the Company may undertake in the
future, they may ultimately differ from actual results. Included in these
estimates are assumptions about allowances for valuation of deferred tax assets.
The provision for asset retirement obligation as well as management's impairment
assessment on its oil and gas properties and other long lived assets are based
on estimates and by their nature, these estimates are subject to measurement
uncertainty and the effect on the financial statements of changes in these
estimates, in future periods, could be significant.


Property and Equipment
----------------------

Property and equipment is recorded at cost. Depreciation of assets is provided
by use of a declining balance method over the estimated useful lives of the
related assets. Expenditures for replacements, renewals, and betterments are
capitalized. Maintenance and repairs are charged to operations as incurred.


Asset Retirement Obligations
----------------------------

The Company recognizes a liability for asset retirement obligations in the
period in which they are incurred and/or in which a reasonable estimate of such
costs can be made. Asset retirement obligations include those legal obligations
where the Company will be required to retire tangible long-lived assets such as
producing well sites. The asset retirement obligation is measured at fair value
and recorded as a liability and capitalized as part of the cost of the related
long-lived asset as an asset retirement cost. The asset retirement obligation
accretes until the time the asset retirement obligation is expected to settle
while the asset retirement costs for natural gas and crude oil assets are
amortized using the unit-of-production method.

Amortization of asset retirement costs and accretion of the asset retirement
obligation are included in depletion, depreciation and accretion. Actual asset
retirement costs are recorded against the obligation when incurred. Any
difference between the recorded asset retirement obligations and the actual
retirement costs incurred is recorded in depletion, depreciation and accretion.

Share Based Compensation
------------------------

The Company records compensation expense in the Consolidated Financial
Statements for share based payments using the fair value method pursuant to
Financial Accounting Standards Board Statement ("FASB") No. 123R. The fair value
of share-based compensation to employees will be determined using an option
pricing model at the time of grant. Fair value for common shares issued for
goods or services rendered by non-employees are measured based on the fair value
of the goods or services received. Stock-based compensation expense is included
in general and administrative expense with a corresponding increase to capital
in excess of par.



                                       7
<PAGE>


Foreign Currency Translation
----------------------------

The functional currency for the Company's foreign operations is the Canadian
dollar. The translation from the applicable foreign currencies to U.S. dollars
is performed for balance sheet accounts using current exchange rates in effect
at the balance sheet date, while income, expenses and cash flows are translated
at the average exchange rates for the period. The resulting translation
adjustments are recorded as a component of other comprehensive income. Gains or
losses resulting from foreign currency transactions are included in other
income/expenses.

3.   CHANGE IN ACCOUNTING POLICY

Oil and Gas Properties
----------------------

The Company was following the successful efforts method of accounting for oil
and gas properties pursuant to FAS 19 (as amended) "Financial Accounting and
Reporting by oil and gas producing companies" for costs of oil and gas
properties. Under this method, acquisition costs of oil and gas properties and
costs of drilling and equipping development wells are capitalized. Costs of
drilling exploratory wells are initially capitalized and, if subsequently
determined to be unsuccessful, are charges to expenses. All other exploration
costs, including geological and geophysical costs and carrying and maintenance
cost are charged to exploration expenses when incurred. The Company has decided
to change the accounting policy for oil and gas properties and adopt the full
cost method. There are no adjustments to the prior periods financial statements
for this change in accounting policy.

Under the full cost method of accounting for oil and gas operations all costs
associated with the exploration for and development of oil and gas reserves are
capitalized on a country-by-country basis. Such costs include land acquisition
costs, geological and geophysical expenses, carrying charges on non-producing
properties, costs of drilling both productive and non-productive wells,
production equipment and overhead charges directly related to acquisition,
exploration and development activities. Proceeds from the sale of oil and gas
properties are applied against capitalized costs with no gain or loss
recognized, unless such a sale would alter the rate of depletion and
depreciation by more than 25 percent in a particular country, in which case a
gain or loss on disposal is recorded.

Capitalized costs within each country are depleted and depreciated on the
unit-of-production method based on the estimated gross proved reserves as
determined by independent petroleum engineers. Oil and gas reserves and
production are converted into equivalent units on the basis of 6,000 cubic feet
of natural gas to one barrel of oil. Depletion and depreciation is calculated
using the capitalized costs, including estimated asset retirement costs, plus
the estimated future costs to be incurred in developing proved reserves, net of
estimated salvage value.

An impairment loss is recognized in net income if the carrying amount of a
country (cost centre) is not recoverable and the carrying amount of the cost
center exceeds its fair value. The carrying amount of the cost centre includes
the capitalized costs of proved oil and natural gas properties, net of
accumulated depletion and deferred income taxes and is not recoverable if it
exceeds the estimated future net cash flows from proved oil and natural gas
reserves discounted at ten percent (net of related tax effects) plus the lower
of cost of fair value of unproved properties included in the costs being
amortized (or the costs of unproved properties that have been subject to a
separate impairment test and contain no probable reserves).

Costs of acquiring and evaluating unproved properties and major development
projects are initially excluded from the depletion and depreciation calculation
until it is determined whether or not proved reserves can be assigned to such
properties. Costs of unproved properties and major development projects are
transferred to depletable costs based on the percentage of reserves assigned to
each project over the expected total reserves when the project was initiated.
These costs are assessed periodically to ascertain whether impairment has
occurred.


                                       8
<PAGE>


Some of the Company's oil and gas activities are conducted jointly with others.
The accounts reflect only the Company's proportionate interest in such
activities.

4.   CAPITAL ASSETS
                                        Accumulated    Net Book      Net Book
                                       depreciation     Value         Value
                                           and         June 30,     December 31,
                             Cost       depletion        2006          2005
                          ----------   ------------   ----------    ------------
Property and Equipment    $   28,197    $    4,098    $   24,099    $   12,828

Oil and Gas Properties     1,254,074             -     1,254,074       267,956
                          ----------   ------------   ----------    ------------
Total                     $1,282,271    $    4,098    $1,278,173    $  280,784
                          ----------   ------------   ----------    ------------

All oil and gas properties are unproven as of June 30, 2006 therefore no
depletion has been calculated.


5.   ASSET RETIREMENT OBLIGATIONS


Changes in the carrying amounts of the asset retirement obligations associated
with the Company's oil and natural gas properties are as follows:

                                                                          2006
                                                                         -------
Asset retirement obligations, December 31, 2005                               -
Obligations incurred during period                                       52,822
Obligations settled during the period                                         -
Accretion                                                                   858
Foreign exchange gain/(loss)                                                (48)
                                                                         -------
Asset retirement obligations, June 30, 2006                              53,632
                                                                         -------


6.   SHARE CAPITAL

Authorized:
       100,000,000 common shares at $0.001 par value

                                                                    Additional
                                                                      Paid in
                                           Number        Value        Capital
                                         ----------   -----------   -----------
Balance at June 30, 2005 and
 December 31, 2005                          473,558   $       473   $    25,750
Private Placement, net of issue costs    16,000,000        16,000       756,501
Private Placement, net of issue costs       933,324           933     1,259,066
Shares issued for service                 1,000,000         1,000        39,000
2:1 Stock split                          18,407,362        18,407       (18,407)
Shares issued for service, net of costs   7,500,000         7,500       324,474
2:1 Stock split                          44,315,184        44,315       (44,315)
Private Placement, net of issue costs     1,130,000         1,130     1,766,131
                                         ----------   -----------   -----------
Balance June 30, 2006                    89,759,428   $    89,758   $ 4,108,200
                                         ----------   -----------   -----------


At the annual general meeting held on July 18, 2006, the shareholders of the
Company voted in favor of increasing the authorized common shares to
300,000,000.

On January 13, 2006, 16,000,000 shares of common stock were issued pursuant to
two private placements that closed December 22, 2005 (15 million shares, for
gross proceeds of $300,000) and December 30, 2005 (1 million shares, for gross
proceeds of $500,000) respectively, recorded as "Shares Issuable" at December
31, 2005 as the shares were not issued until January 13, 2006. All funds due
from these private placements were received by December 31, 2005.


                                       9
<PAGE>


The Company closed a private placement in January for 933,324 common shares at a
price of $1.50 per share for gross proceeds of $1,400,000.

On February 20, 2006 the Company's stock split forward by paying a stock
dividend to our existing shareholders. All shareholders of record on February
14, 2006 received 1 dividend share for every share they owned amounting to
18,407,362 shares of common stock issued.

During 2006, the Company issued 8,500,000 common shares, pursuant to an S8
registration, for services provided to the Company that have been recorded under
the provisions of SFAS No. 123R relating to transactions with non-employees
where the fair value of the services rendered has been recorded as an expense
and an increase in capital in excess par.

On May 1, 2006 the Company's stock split forward by paying a stock dividend to
our existing shareholders. All shareholders of record on April 28, 2006 received
1 dividend share for every share they owned amounting to 44,315,184 shares of
common stock issued.


The Company closed a private placement in June for 1,130,000 units at a price of
$1.70 per unit for gross proceeds of $1,921,000. Each unit entitled the
subscriber to one common share of the Company and one warrant. An amount of
$85,000 is receivable from a subscriber at June 30, 2006.


Warrants

Pursuant to a private placement in June, 2006 the Company has 1,130,000 warrants
outstanding as of June 30, 2006. Each warrant entitles the warrant holder to
exchange one warrant for one common share at a price of $2.50 until June 30,
2008 and $3.50 from July 1, 2008 to June 30, 2011.


7.   RELATED PARTY TRANSACTIONS

Officers and Directors of the Company purchased 10,200,000 ($0.02 per share for
$204,000) common shares and 50,000 ($0.50 per share for $25,000) common shares
of the Company in the December, 2005 private placements. These shares were not
issued by the transfer agent until January 13, 2006 and were reflected in
shareholders' deficiency as part of the caption "Shares Issuable" at December
31, 2005.












                                       10
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

All statements contained herein that are not historical facts, including, but
not limited to, statements regarding the Company's current business strategy,
the Company's projected sources and uses of cash, and the Company's plans for
future development and operations, are based upon current expectations. These
statements are forward-looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors that
could cause actual results to differ materially are the following: the
availability of sufficient capital to finance the Company's business plans on
terms satisfactory to the Company; competitive factors; changes in labor,
equipment and capital costs; changes in regulations affecting the Company's
business; future acquisitions or strategic partnerships; general business and
economic conditions; and factors described from time to time in the reports
filed by the Company with the Securities and Exchange Commission. The Company
cautions readers not to place undue reliance on any such forward-looking
statements, which statements are made pursuant to the Private Litigation Reform
Act of 1995 and, as a result, are pertinent only as of the date made.

PLAN OF OPERATION

The Company had no revenue for the quarters ended June 30, 2006 or 2005. In the
next twelve months Kodiak plans to progressively and methodically develop its
asset base.

Canada
Kodiak drilled two wells in March of 2006 on the Manyberries property. Kodiak
has negotiated an agreement whereby the company will earn 100% of the project
after drilling 3 shallow gas wells. To date, 2 wells have been drilled and one
recompleted and a substantial amount of seismic information purchased and
processed. We expect to drill the third well in the third quarter of 2006. In
the next twelve months we plan to drill more shallow gas wells and complete a 3D
seismic program to prove the existence of deeper oil plays. Upon confirmation of
sufficient reserves, pipelines will be constructed to tie the wells into
existing systems.

For the Granlea (Province) property a 2D seismic program was completed, a well
drilled/completed to the Sawtooth formation and a completion of a pipeline tie
in is expected in late Q3. The well will be placed on production at that time.
Based on production results, additional drilling and land acquisitions in the
area will be discussed with our joint venture partner.

Montana
Our partner is the operator of the Montana shallow gas project and three
drilling locations have been identified. They are in the process of obtaining
the last license, and equipment has been sourced. We expect drilling to commence
in the third quarter of 2006. Subsequent to the drilling, any successful wells
will be tied into existing facilities in the third quarter of 2006. We have
allocated approximately $400,000 for this project for the 3nd quarter of 2006.


                                       11
<PAGE>


Utah
Kodiak has signed a letter of intent with Flair Petroleum (Reibanc USA) for 22%
of a Heavy Oil Project. Subject to, and subsequent to, due diligence on the
leases and an executed joint venture agreement, Kodiak will fund up to
$2,000,000 for a feasibility study consisting of geological work, preliminary
engineering and studies, to support the subsequent development of the project.
This work would take approximately 18 to 24 months to complete, once initiated.


Financial Condition and Changes in Financial Condition

The Company had no revenues for the quarter ended June 30, 2006.

Net Loss for the quarter ended June 30, 2006 totaled $569,584. The majority of
the net loss relates to $337,500 for common shares issued for services provided
to the Company that have been recorded under the provisions of SFAS No. 123R
relating to transactions with non-employees where the fair value of the services
rendered has been recorded as an expense with an increase in capital in excess
par. Other administrative expenses relate to consulting, public company
expenses, general and administration and legal.

Net loss for the quarter ended June 30, 2005 totaled $1,359. The expenses relate
to general and administrative costs.

Liquidity and Capital Resources:

Since inception to June 30, 2006, we have funded our operations from the sale of
securities and loans from shareholders.

As of June 30, 2006, our assets totaled $3,337,174, which consisted primarily of
cash from the June private placement, oil and gas rights and land in Canada and
Montana. Our total liabilities were $259,935, which were primarily accounts
payable for administrative expenses and for financing costs for the June private
placement. We had stockholders' equity of $3,023,607.

On January 20, 2006 Kodiak Energy raised gross proceeds of $1,400,000 through
the sale of 933,324 common shares at a price of $1.50 per share. Kodiak Energy
used the funds for drilling 2 wells at the Manyberries property, and general
corporate purposes. On June 30 Kodiak Energy raised gross proceeds of $1,921,000
through the sale of 1,130,000 units at a price of $1.70 per share. The units
consisted of one common share and one warrant to purchase a share for $2.50
until June 30, 2008 and $3.50 from July 1, 2008 until June 30, 2011. The funds
will be used for further development of the Company's land holdings as well as
general corporate purposes. As at June 30, 2006 the working capital was
$1,799,066.

RAISING CAPITAL

The Company currently lacks the capital resources to fully implement and carry
out its business plan as described herein. At some point in the future we expect
to raise additional capital, either through debt, equity or any combination


                                       12
<PAGE>


thereof. In the event that additional capital is raised at some time in the
future, existing shareholders will experience dilution of their interest in the
Company.

ITEM 3 CONTROLS AND PROCEDURES

Mr. Mark Hlady, the Company's current, CEO and CFO has concluded, based on his
evaluation as of a date within 90 days prior to the filing of this report, that
the Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in the reports filed or
submitted by it under the Securities Exchange Act of 1934, as amended, is
recorded, processed, summarized and reported as specified in the Securities and
Exchange Commission's rules and forms, and include controls and procedures
designed to ensure that information required to be disclosed by the Company in
such reports is accumulated and communicated to the Company's management, as
appropriate, to allow timely decisions regarding required disclosure.


                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

PP Information

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On July 18, 2006, Kodiak Energy held its annual shareholders meeting. At the
meeting the shareholders voted in favour of four proposals put to them, listed
below.

The shareholders elected the following persons to act as directors until the
next meeting of the shareholders; Mark Hlady, William Tighe, Glenn Watt, Peter
Schriber and Marvin Jones.

The shareholders approved the stock option plan of Kodiak Energy, Inc.

The shareholders approved an amendment to the certificate of incorporation to
change the name of the company to "Kodiak Petroleum Ltd.

The shareholders also approved an amendment to the certificate of incorporation
to increase the number of shares of authorized common stock from 100,000,000 to
300,000,000.

Item 5. OTHER INFORMATION

None.



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<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

   31.1 - Certification of President Pursuant to Section 302 of the
          Sarbanes-Oxley Act of 2002

   31.2 - Certification of Chief Financial Officer to Section 302 of the
          Sarbanes-Oxley Act of 2002

   32   - Certification of President and Chief Financial Officer Pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002

REPORTS ON FORM 8-K

On April 27, 2006 we filed an 8K under item 5.02 Election of Directors and
Appointment of Principal Officers.



                                   SIGNATURES
                                   ----------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                              KODIAK ENERGY, INC.
                                               (Registrant)


Dated: August 23, 2006                           By: /s/  Mark Hlady
                                                 -------------------
                                                 Mark Hlady
                                                 CEO, CFO and Chairman























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